Yes, everything in Launchbox is as expected. However I believe I have identified the cause. For me, the issue manifests when the option "Use Game Background Videos" is enabled/checked. If enabled the background is a game video and the previously highlighted area is sometimes a screenshot but usually not. However when there is a screenshot for one game that actually loads but not the next game, the image will not change until I scroll to a game that meets the criteria, whatever that may be. The best i can do is attempt to take a video and post it, hopefully directly to this thread. I do not know if my experience is actually working as intended or a bug. I will attempt to take a video and edit this post accordingly should I succeed. In the mean time a screen shot of the aforementioned setting will have to suffice. The issue, if it is one is easily reproduced by enabling the "Use Game Background Videos" option.
Bug Or Working As Intended.mp4
After some review I am beginning to wonder if things are working as intended based on the options selected or if this is a user error situation. Perhaps I am a bit silly but I like having the video in the background and a screenshot under the box art. However, it would seem in most but not all instances with the "Use Game Background Videos" option disabled its mostly game videos that appear underneath the box art instead of screenshots. If I enable the option, most backgrounds are videos but most screenshots (or what I expect to be screenshots) don't update below the box art. I am banking on user error here but perhaps this is more of a feature request in the making instead of an actual bug or troubleshooting issue.